Archive for June, 2011

Did you know that elders throughout the United States lose an estimated $2.9 billion or more annually due to elder financial abuse and exploitation? These funds could easily have been used to pay for an elderâ€™s basic needs such as housing, food, and/or medical care.

Elder financial abuse is an injustice that needs to be brought to the publicâ€™s attention. World Elder Abuse Awareness Day provides us with an opportunity to shed light on this incredibly devastating problem and to promote a dialogue around providing resources and education to helping elders avoid such an unfortunate fate.

MetLifeâ€™s Mature Market Institute, in collaboration with the National Committee for the Prevention of Elder Abuse (NCPEA), and the Center for Gerontology at Virginia Tech, released a study this year that provides a comprehensive understanding of the extent and implications of elder financial abuse in our society. The overview of the study suggests that,

“Older individuals can be especially vulnerable to financial abuse or exploitation at the hands of others. Individuals with physical or cognitive impairments are at even greater risk. The source of mistreatment may be a stranger or someone an individualâ€™s trusts â€“ even a family member. As a caregiver, it is important that you are alert to signs of elder financial abuse and that you are able to help your family members take precautions to prevent them from becoming victims.”

To read more about this report and to access a list of resources that can both educate and assist in the fight against elder financial abuse please go to our Financial Elder Abuse Resource page here. Take the time today to educate yourself and others so that as a society we are more aware of worldwide elder abuse.

This blog appeared as a guest post on Wider Opportunities for Women’s blog in honor of Older Americans Month. Check it out here.

Social Security is a hot topic in the news today. Many are publicly asking: will the system still be here for future generations? While there is a lot that can be done to strengthen the solvency of Social Security, the truth is that itâ€™s not going broke and there are plenty of reasons to maintain it as a strong and sound social insurance program. In fact according to the most recent Trustees Report there was an annual surplus of $69 billion in 2010.

So hereâ€™s the big question: What exactly is the Social Security shortfall and how urgent is the need to fix the system? Key demographic changes do put a more immediate strain on Social Securityâ€™s financing:

The large boomer generation is beginning to retire, so more people will be collecting benefits. People are not only living longer and collecting benefits for longer periods. For these reasons, Social Security faces a shortfall in about 2036.

Without any change, Social Security would only have enough revenue to pay about 75-78% of promised benefits in 2036. The short-fall is about 22-25%.[1]

So the system is not â€œtotally brokeâ€ or â€œrunning out of moneyâ€. When people say the system is â€œtotally brokeâ€ they are incorrect.

However, many agree that although there is no immediate crisis, the longer we delay putting the program into long-term financial balance, the more drastic the changes that will have to be made in the future.

So what are the current reform proposals currently on the table?

Current reform proposal options run the gamut from simply tweaking proposals to change revenues and benefits to more dramatic changes of partially privatizing the system into individually invested private accounts.

The National Commission on Fiscal Responsibility and Reform plan calls for:

changing the benefit formula to slow the growth of benefits for many workers,

an increase in the retirement age to 68 by 2050,

an increase in the payroll tax on upper income Americans,

a cut in the annual cost of living increases for Social Security benefits,

a resulting reduction in the monthly benefits for most beneficiaries, and

a requirement that newly hired state and local government employees be required to pay Social Security taxes.[2]

Other reform options

There are others who support a mix of options including tax increases and benefit cuts to put the system on sounder financial footing.

Social Security payroll taxes apply to a workerâ€™s earnings only up to a capâ€”$106,800 in 2011. Others suggest raising the cap so that the payroll tax is applied to 90% of all earnings as was intended when the program was started.

Another option is to raise the payroll tax on everyone. A tax increase of about 1% on employees and 1% on employers would eliminate the shortfall.

Partial privatization would allow workers to divert a portion of the current payroll taxes into accounts invested in the stock market. The guaranteed benefit under Social Security would be reduced and workers would rely on their accounts to make up the difference.

Extend coverage to new workers in state plans.

Only time will tell how the shortfalls of Social Security will be strengthened. However, itâ€™s important to keep in mind that this is a program that currently provides benefits to over 54 million Americans today. Social Security is the nationâ€™s single most successful social program. Making sure that it continues to provide a foundation of retirement security to American workers should guide any future reform.

[1] â€œThe 2010 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds.â€ The Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds. Referred to the Committee on Ways and Means. 9 August 2010. <http://www.ssa.gov/OACT/TR/2010/tr2010.pdf>.
[2]The Moment of Truth. Washington, D.C.: The National Commission on Fiscal Responsibility and Reform, 2010.

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